Question

YQR has a market value of $125 million and 5 million shares outstanding.  HKG has a market...

YQR has a market value of $125 million and 5 million shares outstanding.  HKG has a market value of $40 million and 2 million shares outstanding.  YQR thinks of taking over HKG with a premium of $10 million. The combined firm will be worth $185 million.  If YQR offers 2 million shares of its stock in exchange for the 2 million shares of HKG, what will the stock price of YQR be after the acquisition?  What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer of $50 million?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a...
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a market value of $40 million and 2 million shares outstanding. YQR thinks of taking over HKG with a premium of $10 million. The combined firm will be worth $185 million. If YQR offers 2 million shares of its stock in exchange for the 2 million shares of HKG, what will the stock price of YQR be after the acquisition? What exchange ratio between the...
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a...
YQR has a market value of $125 million and 5 million shares outstanding. HKG has a market value of $40 million and 2 million shares outstanding. YQR thinks of taking over HKG with a premium of $10 million. The combined firm will be worth $185 million. If YQR offers 1.2 million shares of its stock in exchange for the 2 million shares of HKG, what will the stock price of YQR be after the acquisition? What exchange ratio between the...
Harrods PLC has a market value of £131 million and 4 million shares outstanding. Selfridge Department...
Harrods PLC has a market value of £131 million and 4 million shares outstanding. Selfridge Department Store has a market value of £33 million and 2 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods's CFO concludes that the combined firm with synergy will be worth £179 million and Selfridge can be acquired at a premium of £10 million. a. If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge, a. what...
Harrods PLC has a market value of £139 million and 5 million shares outstanding. Selfridge Department...
Harrods PLC has a market value of £139 million and 5 million shares outstanding. Selfridge Department Store has a market value of £41 million and 2 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods’s CFO concludes that the combined firm with synergy will be worth £195 million and Selfridge can be acquired at a premium of £10 million. a. If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge, what will...
Harrods Inc. has a market value of $360 million and 30 million shares outstanding. Selfridge Department...
Harrods Inc. has a market value of $360 million and 30 million shares outstanding. Selfridge Department Store has a market value of $144 million and 18 million shares outstanding. Harrods is contemplating acquiring Selfridge and expects the combined firm to be worth $540 million. Selfridge can be acquired at a premium of $15 million. a. If Harrods offers 11 million shares of its stock in exchange for the 18 million shares of Selfridge, what will the Harrods’ stock price be...
Harrods PLC has a market value of £137 million and 5 million shares outstanding. Selfridge Department...
Harrods PLC has a market value of £137 million and 5 million shares outstanding. Selfridge Department Store has a market value of £39 million and 3 million shares outstanding. Harrods is contemplating acquiring Selfridge. Harrods’s CFO concludes that the combined firm with synergy will be worth £191 million and Selfridge can be acquired at a premium of £10 million. b. What exchange ratio between the two stocks would make the value of a stock offer equivalent to a cash offer...
ABC has 1.00 million shares? outstanding, each of which has a price of $16. It has...
ABC has 1.00 million shares? outstanding, each of which has a price of $16. It has made a takeover offer of XYZ? Corporation, which has 1.00 million shares? outstanding, and a price per share of $2.73. Assume that the takeover will occur with certainty and all market participants know this.? Furthermore, there are no synergies to merging the two firms. a. Assume ABC made a cash offer to purchase XYZ for $3.48 million. What happens to the price of ABC...
ABC has 1 million shares​ outstanding, each of which has a price of $ 20. It...
ABC has 1 million shares​ outstanding, each of which has a price of $ 20. It has made a takeover offer of XYZ Corporation which has 1million shares​ outstanding, and a price per share of $ 2.43. Assume that the takeover will occur with certainty and all market participants know this.​ Furthermore, there are no synergies to merging the two firms. a. Assume ABC made a cash offer to purchase XYZ for $ 4.80million. What happens to the price of...
ABC has 1.00 million shares​ outstanding, each of which has a price of $ 17 It...
ABC has 1.00 million shares​ outstanding, each of which has a price of $ 17 It has made a takeover offer of XYZ​ Corporation, which has 1.00 million shares​outstanding, and a price per share of $ 2.58. Assume that the takeover will occur with certainty and all market participants know this.​ Furthermore, there are no synergies to merging the two firms. a. Assume ABC made a cash offer to purchase XYZ for$ 3.95million. What happens to the price of ABC...
Your company has earnings per share of $5. It has 1 million shares​ outstanding, each of...
Your company has earnings per share of $5. It has 1 million shares​ outstanding, each of which has a price of $39. You are thinking of buying​ TargetCo, which has earnings of $2 per​ share, 1 million shares​ outstanding, and a price per share of $21. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offered an exchange ratio such​ that, at current​ pre-announcement share prices for both​ firms, the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT